UPDATE 2-WTO members warn on emerging protectionism

(Recasts with comments from official)
By Jonathan Lynn
GENEVA, Feb 9 (Reuters) - The risk of a global lurch into
protectionism is getting worse, though trade measures taken to
tackle the financial crisis have not seriously fuelled it so
far, World Trade Organisation (WTO) members agreed on Monday.
The WTO's 153 members agreed to intensify monitoring of the
impact of moves to block imports or boost exports, a senior WTO
official told a news briefing.
"Whilst there was an appreciation that so far we don't
appear to be deep in the mire, I think everybody expects things
to get worse before they get better," said Richard Eglin,
director of the WTO's trade policies review division.
WTO members had earlier reviewed Director-General Pascal
Lamy's January report showing that countries had ignored a Group
of 20 (G20) plea in November not to raise trade barriers.
"The report has a clear unequivocal pattern: one of emerging
protectionism," Brazil's WTO ambassador, Roberto Azevedo, told
the meeting, noting the report covered only the last quarter of
2008, the early stages of the crisis.
An updated report due in mid-March will give G20 leaders
more information about protectionist trends before their summit
in London on April 2.
Erecting trade barriers to defend jobs may deepen the global
recession by making it harder for other countries to sell their
goods abroad, as occurred during the 1930s Great Depression.
The latest International Monetary Fund (IMF) forecast sees
world trade contracting by 2.8 percent this year after growing
4.1 percent in 2008 and 7.2 percent in 2007, a particularly
worrying trend as slowing trade growth is now the main
depressing factor on world output, according to Lamy.
Members also agreed to notify changes in tariffs and other
trade measures promptly. Lack of official information meant the
January report was largely based on news gleaned from the press.
"There is not nearly enough real-time flow of information on
trade policies or trade-related measures available for the WTO,
the members, or the international community to draw serious
conclusions on the state of trade policy-making in these very,
very difficult economic times," Eglin said.
The WTO monitoring does not aim to criticise individual WTO
members. "The purpose of this exercise... is to put a
thermometer in there and see: Is the temperature of
protectionism going up? and we'll see that from looking overall
at 153 members, not from pointing a finger at this member or
that member," Eglin said.
Some countries had been concerned the monitoring could turn
into an IMF-style policing of agreements, and Bolivia and some
other members said the report neglected the interests of poor
countries. The impact of trade measures on developing countries
will be analysed in the next report.
But the meeting heard some criticism of individual
countries' moves, especially the European Union's decision to
reinstate export subsidies for dairy produce.
The WTO report looks at tariff rises, mainly by developing
countries which can raise duties under existing rules. Rich
countries' tariffs are already at or near agreed ceilings.
It details stimulus packages, such as for the car industry,
which many developing countries see as a more insidious form of
protectionism because they favour domestic producers and poor
countries cannot afford the cash.
No one at the meeting mentioned France's pledge on Monday of
3 billion euros ($3.89 billion) each to ailing carmakers PSA
Peugeot Citroen and Renault SA in return for
promises to safeguard jobs in France. [nL9664042]
The WTO report lists financial bailouts, saying they, too,
can distort competition between institutions by providing state
aid or subsidies, though it is not clear how they will affect
trade.
(The WTO has not published the report, but it is available on
the web, for instance at:
http://www.tradeobservatory.org/library.cfm?refid=105042)
(Editing by Tim Pearce)
((jonathan.lynn@reuters.com; +41 22 733 3831; Reuters
Messaging: jonathan.lynn.reuters.com@reuters.net ))
($1=.7703 Euro)
Keywords: TRADE WTO/PROTECTIONISM

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